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Capital City
Manila
Currency
Philippine Peso
(
₱
)
Timezone
GMT +8
Payroll Frequency
bi-monthly
Tax Year
1 January - 31 December
Employer Tax
14% + 950 PHP
Languages
Filipino
English
Capital City
Manila
Currency
Philippine Peso
(
₱
)
Timezone
GMT +8
Payroll Frequency
bi-monthly
Tax Year
1 January - 31 December
Employer Tax
14% + 950 PHP
Languages
Filipino
English
The Philippines, ranked as the 12th most populous country globally, possesses a substantial talent pool, with 50% of its population being under the age of 25 and fluent in English. This demographic composition provides a rich source of professional skills for various industries and sectors.
In the Philippines, the business culture is centered on relationships. Success in this country requires third-party introductions, the cultivation of strong bonds, and the maintenance of open lines of communication with potential employees.
Employers in the Philippines are not legally obligated to provide paid sick leave to employees. Employees can utilize the "service incentive leave," which offers five days of paid vacation for either vacation or sick leave purposes.
In the Philippines, employees have the right to a 13th-month salary, equivalent to 1/12th of their annual earnings. This can be disbursed in full around December 24th or divided into two, with one half paid at the commencement of the school year in June.
Businesses can only operate smoothly in The Philippines if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in The Philippines below, to avoid any compliance issues.
When hiring In the Philippines, there is no legal obligation to establish a written employment contract. Employment contracts typically contain:
We can help you get a new employee started in The Philippines quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.
For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.
Employees generally work eight hours per day, amounting to 40 hours per week. Certain industries operating on a six-day week can extend to 48 hours per week. Employers are obligated to grant a meal break of at least 60 minutes to their employees.
Any work exceeding eight hours in a day is regarded as overtime and should be remunerated with an extra 25% of the standard basic rate, rising to 30% on special holidays and 100% on regular holidays/rest days. Overtime pay is not applicable to employees in supervisory or managerial positions.
In the Philippines, permanent employees undergo a mandatory probationary period of six months.
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1 January - 31 December is the 12-month accounting period that businesses in The Philippines use for financial and tax reporting purposes.
The payroll cycle in The Philippines is usually bi-monthly, with employees being paid by the 16th and last working day of the month.
The minimum wage for employees in The Philippines is typically 80.63 PHP per hour, amounting to ~13,978 PHP per month for a typical 40 hour work week.
Employees are entitled to a 13th-month salary, which is 1/12th of their annual earnings, paid in full around December 24th or divided into two with one half in June.
Employer payroll contributions are generally estimated at an additional 14% + 950 PHP on top of the employee salary in The Philippines.
In The Philippines , the typical estimation for employee payroll contributions cost is around 10% + 450 PHP%.
Individual income tax in the Philippines follows progressive rates ranging from 0% to 35%, with household status and the number of children being additional factors that can impact overall rates.
Social security contributions fund the public pension system. Upon retirement due to old age, members are eligible for a retirement benefit, provided they've made a minimum of 120 monthly contributions. This benefit can be received as a monthly pension or a lump sum.
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In the Philippines, work permits and visas are essential for employers looking to hire foreign nationals. The process typically starts with obtaining an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE), which confirms that no qualified Filipino is available for the role. Once the AEP is secured, employers can proceed with work visa applications such as the 9(g) Pre-Arranged Employment Visa, which allows foreign nationals to work for a specific employer, or the 47(a)(2) Special Non-Immigrant Visa for employees of regional headquarters or multinational firms. Short-term assignments are covered by the Special Work Permit (SWP), while the Provisional Work Permit (PWP) allows employees to begin work while awaiting their 9(g) visa approval.
Employers must follow a structured application process, including labor market tests, document submissions, and fee payments, while ensuring compliance with local labor regulations. Understanding the various permit and visa types and planning for processing times and renewals is crucial to successfully employing international talent in the Philippines.
The annual leave entitlement in The Philippines is 5 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.
In a calendar year, the Philippines observes 18 public holidays, which are separate from the minimum paid leave entitlement and are in addition to annual leave. The following are nationally recognized holidays in the Philippines:
Full-time employees in the Philippines are eligible for a minimum of five days of paid annual leave after completing one year of service. It is common to offer employees 15 days of leave. Unused holidays is often compensated at the year-end. Part-time employees do not have leave entitlements.
Maternity paid leave is initially 105 days, with an option to extend for an additional 30 days. No payment will be provided if the employee decides to extend beyond the initial period.
Fathers are eligible for a fully paid paternity leave of up to seven days.
Paid Sick leave is not mandated by the Labor Code, but employees can utilize the "service incentive leave," which provides five days of paid vacation, applicable for either vacation or sick leave. Reimbursement may be possible through the Social Security System (SSS) sickness benefit.
There are no legal provisions for additional parental leave beyond maternity and paternity leave. However, solo parents are eligible to seven days off per year to fulfill their parental duties.
Employees in the Philippines receive rehabilitation leave due to work-related disabilities. The medical authority recommends the duration, frequency, and conditions for taking this leave.
Female employees with at least six months of continuous service in the last year are eligible for two months of fully paid leave following gynecological surgery.
Terminating employment in the Philippines is permissible for 'just' or 'authorised' causes, with the employer required to prove the lawfulness in a proper forum. Authorised causes necessitate written notice from the employer while 'just' causes include:
Notice periods differ depending on whether termination is based on "just" or "authorised" cause:
Severance pay is applicable in cases where the employer initiates termination for 'authorised' causes, and it amounts to one month's pay for each year of employment.
Disclaimer
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
ABOUT THE AUTHOR
Jesse Weisz
Jesse is an experienced R&D Analyst at Playroll, a leading Employer of Record (EOR) provider. With a strong background in data analysis and market research, Jesse specializes in identifying emerging trends and driving innovation in global HR solutions. She is an all-rounder, critical thinker and success-seeker (often inextricably linked to being a late-night tea drinker).
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